Keeping an eye on Medicare

As the healthcare reform discussion continues to swirl in Washington, it’s easy to forget there are other healthcare issues to talk about. One of those affecting long-term care community is a proposed rule that would reduce Medicare funding for skilled nursing care by $1.05 billion in fiscal year 2010.

Today, about 20 certified nursing aides (CNAs) from 10 states asked members of Congress to urge Kathleen Sebelius, secretary of the Department of Health and Human Services, to oppose the rule. They were representing the Coalition to Protect Senior Care, which comprises 15 member groups, including the American Health Care Association, the Alliance for Quality Nursing Home Care, the American College of Health Care Administrators, and the American Association for Long Term Care Nursing.

The coalition’s concern is the potential loss of about 30,000 healthcare jobs if the proposal takes effect.

“Over 70% of the budget is spent on labor,” Lisa Cantrell, a founding member of the coalition, told me. “When you’re looking at funding cuts of this magnitude, it definitely affects the labor, which [in turn] affects people’s personal lives and the care that’s delivered. It’s a vicious circle.”

Nursing homes are especially perturbed by this proposal because it is based on a miscalculation by the Centers for Medicare & Medicaid Services regarding the costs involved in expanding the Medicare patient classification system, also known as Resource Utilization Groups (RUGs). Last year, CMS proposed a similar rule, but it did not take effect. This year could be different because of the economy, Cantrell noted.

“There’s a lot of organizations fighting for their funding right now and … with the state of the economy it makes us very fearful that a cut of this magnitude could take place," she said. "That’s why we’re here.”

Makes sense to me.

The 'CRASS Act'

Apparently, not everyone is drinking the Kool-Aid regarding the disability insurance proposal contained in the bill from the Senate Committee on Health, Education, Labor and Pensions (HELP).

This portion of the bill, which is called the Community Living Assistance Services and Supports (CLASS) Act, calls for workers to buy into a program that would provide them a daily cash allowance during a period of disability. The Center for Long-Term Care Reform Inc. (www.centerltc.com), a private institute that works to improve financing for long-term care, has dubbed it the CRASS Act. It said the following in a newsletter sent to members Thursday:

“What would you call a proposal that (1) taxes everyone like Medicare in order to (2) create a trust fund like Medicare's that (3) politicians can spend and replace with IOUs like Medicare's $89 trillion unfunded liability and (4) pays inadequately for benefits like Medicare under (5) severely limited circumstances like Medicare?”

An interesting nickname, to be sure. But does it fit? Would the bill create a grossly expensive and inadequate government program?

I don’t necessarily agree. Social Security and Medicare were considered necessary programs when they came into being (Social Security during the Great Depression in 1935 and Medicare in 1965). They served a purpose, it could be argued, during the periods in which they were created.

But life and certainly the population have changed since their founding. Who would have known that the population of older adults would grow this large or live this long?

Maybe we should think of the CLASS Act as a new program for a new era. Before we assume it would be “just another” unwieldy government entitlement, let’s keep in mind that we’re comparing it to programs that grew out of different times and circumstances.

The CLASS Act may not be perfect, but it would be something. It may just be what we need right now.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan and Senior Editor Elizabeth Newman.